Published by Global Banking & Finance Review®
Posted on March 4, 2026
4 min readLast updated: April 2, 2026
Add as preferred source on GoogleOil prices climbed sharply—Brent rose $1.11 to $82.53 and WTI $0.79 to $75.37—driven by disrupted exports from the Middle East amid the U.S.–Israeli war on Iran, Strait of Hormuz shutdown, and Iraq’s output cuts. Trump’s offer of naval escorts and insurance lent limited relief.
By Arathy Somasekhar
HOUSTON, March 4 (Reuters) - Oil prices settled unchanged on Wednesday at the end of a volatile trading session, as escalating U.S. and Israeli strikes against Iran widened regional tensions and paralysed shipping through the Strait of Hormuz for a fifth day, disrupting vital Middle East oil and gas flows.
Brent crude settled at $81.40 per barrel, flat to Tuesday's close and at its highest since January 2025. U.S. West Texas Intermediate crude settled 10 cents, or 0.1%, higher at $74.66, closing at its highest since June for the second day in a row.
"Oil prices remain elevated as markets grapple with the prospect of a prolonged war and lingering supply disruptions," Nikos Tzabouras, Senior Market Analyst at Tradu.com said.
"The U.S. has signalled a four- to five-week campaign, Iran is seeking to regionalise the conflict and the crucial Strait of Hormuz chokepoint is effectively shut. These developments could overturn previously unfavourable supply-demand dynamics, pushing crude higher and bringing the $100 threshold into view," Tzabouras added.
The Brent benchmark had gained more than $3 to touch $84.48 in morning trading, within sight of multi-month highs, but traded lower after the New York Times reported operatives from Iran's Ministry of Intelligence signalled openness to the U.S. Central Intelligence Agency to talks on ending the war, citing officials briefed on the matter.
On Wednesday, U.S. Defense Secretary Pete Hegseth said the U.S. was winning the war against Iran and that the U.S. military could fight as long as needed.
Israeli and U.S. forces have struck targets across Iran, prompting Iranian retaliatory strikes against energy infrastructure in a region that accounts for just under a third of global oil production.
Iraq, the second-largest crude producer in the Organization of the Petroleum Exporting Countries, has cut output by nearly 1.5 million barrels a day due to storage limits and the lack of an export route, officials told Reuters.
They said the country may have to shut nearly 3 million bpd of output within days if exports do not resume. Traffic through the Strait also remains effectively closed.
U.S. President Donald Trump on Tuesday said the U.S. Navy could begin escorting oil tankers through the strait if necessary, adding that he had ordered the U.S. International Development Finance Corporation to provide political risk insurance and financial guarantees for maritime trade in the Gulf.
The Pentagon and the U.S. Energy Department are working on plans to secure the Strait of Hormuz to ensure safety for oil tankers amid the war on Iran, White House spokeswoman Karoline Leavitt said on Wednesday, adding that Trump and his advisors were also discussing what role the U.S. could have in Iran after the military campaign.
Countries and companies have, meanwhile, begun seeking alternative routes and supplies of crude. India and Indonesia said they were looking for other supplies, while some Chinese refineries were shutting or moving up maintenance plans.
In the U.S., crude stocks rose by 3.5 million barrels in the last week to their highest in three and a half years, the Energy Information Administration said, compared with analysts' expectations in a Reuters poll for a 2.3 million-barrel rise. U.S. gasoline stocks fell by 1.7 million barrels, while distillate stockpiles, which include diesel and heating oil, rose by 429,000 barrels in the week.
"Global supplies remain ample with near record levels of “on the water” tanker storage. Still, until that oil can find a safe home, look for price volatility to continue," said Dennis Kissler, senior vice president of trading at BOK Financial.
(Additional reporting by Trixie Yapp in Singapore and Alex Lawler; Editing by Jason Neely, Mark Potter, Elaine Hardcastle, Diane Craft and David Gregorio)
Oil prices rose due to the ongoing U.S.-Israeli conflict with Iran, which disrupted oil output and exports from the Middle East.
Iranian strikes and export disruptions have halted tankers in the Strait of Hormuz and forced Iraq to cut its oil output significantly.
Brent crude rose $1.11 to $82.53 per barrel, and U.S. WTI crude increased by 79 cents to $75.37 per barrel, both reaching multi-month highs.
Countries like India and Indonesia are seeking alternative energy supplies, while Saudi Aramco attempts to reroute exports via the Red Sea.
The U.S. is considering military escorts for tankers, and offering political risk insurance and financial guarantees for maritime trade.
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